Global Mobility – Managing a Global Workforce in 2015
Global mobility remains an increasingly critical, and often challenging, issue for many companies. This is particularly true as organisations expand into new markets, looking to attract overseas talent, as well as retain their best employees through international assignments. Graham Tollit, Director with The Chapman Consulting Group, interviewed Mario Ferraro to get his perspective on global mobility and what we can expect in 2015. Mario is a renowned subject matter expert in the areas of global mobility and international talent management, with more than 20 years of experience in the design and implementation of solid and effective HR solutions on a regional and global scale in a variety of industry sectors. Mario has been recognised with a number of awards, including the first “Global Mobility Professional of The Year” title, presented by the Forum for Expatriate Management. Following are excerpts from the interview where Mario shared his insights and perspective on global mobility and where the market is going.
GT: Global Mobility can be a real mix of tax, C&B, talent management, cultural training, relocation advice and so on. In your view, how does an organisation best structure who is responsible, in order for this to be effective? Does this fall to the mobility, rewards, or talent management team (HR) or a mix of these? What strategy do you advise clients to adopt, and do you see any key trends at the moment?
MF: Ultimately, mobility is about moving Talent, whether it is for tactical reasons (e.g. project work) or strategic objectives (e.g. career development, succession planning, new market entry, etc). Hence the Talent team should ideally retain ultimate responsibility and control over Talent Mobility. However, in order to do this well, they need to avail themselves of specialist functions, such as the Mobility and Rewards teams, who will provide expert advice and operational support to ensure that the move is properly structured and executed. Supporting all these internal functions, there will be a team of external service providers (typically, Tax, Immigration, Relocation, Cultural Orientation, etc), whose services extend the capabilities and increase the capacity of the internal functions.
GT: Globalisation has altered the talent landscape, and we know there are economic, demographic, cultural, as well as legal pressures on mobility. How does a business begin to combat/ address this?
MF: Globalisation has altered not only the Talent landscape, but also the business and social landscape. The net result is that today’s businesses need to acquire, develop and retain different competencies in order to compete and thrive in a complex and ever-changing global environment. The starting point for all organisations is to devise an effective business strategy to compete globally, and to revise this strategy frequently, often adapting it to specific countries and market conditions. The Talent strategies should always be a direct mirror of such business strategies because, in the end, the success of the business is entirely reliant on having people who can develop effective strategies and execute them competently. Hence, those organisations that are better able to cope with the evolving talent landscape are those that regularly re-align their talent strategies with the business through Workforce Planning, Talent Acquisition, Talent Retention, Talent Development and Succession Planning. These organisations also recognise that Globalisation and new technologies allow them to leverage a global talent pool, giving them access to the best talent, regardless of where the individual resides.
The flip side of the coin, however, is that competition for talent is also becoming global, hence it is critical for businesses to have very effective strategies for talent retention. In addition, as globalisation continues to drive up the number of people working outside of their home countries, it is increasingly important for organisations to enhance their ability to manage cultural diversity, compensation, and global compliance (with tax, immigration, social security and employment law). It is also worth mentioning that globalisation has prompted a proliferation of “virtual teams”, whereby individuals on opposite sides of the world work closely together on projects or business processes. This global interdependence of resources has brought about a rapid erosion of work-life balance, as many employees are effectively part of a team that is always “on”, 24 hours a day.
GT: How does a company identify the most appropriate assignment for its top talent?
MF: International assignments can have different types of objectives. Some are more tactical whereas others are more strategic. In addition, some assignments can be very developmental, whereas others are of little developmental value. Typically, top talent would be deployed on highly strategic and/or highly developmental assignments: for example starting up a business in a new market, and/or an assignment with a stretch goal, perhaps in a challenging location or in a bigger role.
GT: How are emerging countries managing to attract high-calibre mobile talent?
MF: In general, emerging markets are “hungry” for good talent since, by definition, the economy is evolving rapidly, but the availability of qualified local talent is scarce. It is common to see high rates of salary inflation in such markets, as companies compete for a limited pool of talent. Many employees are attracted by these markets by the prospect of career opportunities and/or salary progression, as well as the high developmental value of these assignments. It is not uncommon to see individuals take on a bigger job title or an attractive remuneration package as a result of an assignment to an emerging market. The key challenge; however, is how to repatriate these individuals and reintegrate them into the home country organisation at the end of the assignment. In many emerging markets we are seeing increasing numbers of “returnees”, especially individuals of Chinese or Indian origins who were working or studying oversees, returning to their original homelands to take advantage of attractive career opportunities. Some governments are also trying to reverse the “brain drain” by offering attractive incentives to “returnees”, for example Malaysia’s “Returning Expert Program (REP).”
GT: What can a company do to prepare international assignees to overcome cultural and geographical barriers? How can organisations ensure the right support is in place to make the transition as easy as possble?
MF: Ideally, the company should select the right assignee to start with, as each individual has a different level of adaptability and tolerance to change and cultural diversity. Family members should also be considered when selecting an assignee. Typically, assignees and families who have already successfully completed prior assignments are more likely to succeed in the next one. Some level of cultural orientation and basic language skills will help the family to integrate more quickly. Support for the family members in the host location (networking, more cultural exposure, ideally help with finding a job, etc.) is critical, as the assignee will be busy at work most of the time, whereas the family members are often the ones experiencing the challenges of the “foreign” location.
GT: There are varying motivations for baby-boomers, Gen X, and Gen Y when it comes to talent mobility programmes. What have you seen organisations put in place or do to address or manage this?
MF: It is not surprising that younger individuals can be more easily motivated to undertake an international assignment, as they are keen to gain experience and tend to see overseas exposure as a way to enhance their personal brand and career progression opportunities. It is not uncommon for these younger individuals to “volunteer” for assignments, or to request international exposure during the interview process. In fact, international career opportunities are a good way to attract Gen Y and Millenials. Older individuals, especially those with families, will have a different set of priorities, and will typically give more importance to the financial aspect, as well as practical support provided before, during and after the assignment. Baby Boomers are now close to retirement and may consider some types of assignments as a pre-retirement option. By segmenting and diversifying policies, rather than using a single “blanket” policy for everybody, some organisations are able to motivate individuals in a way that resonates with their life priorities.
GT: Currently, most organisations have a primary focus on utilising talent efficiently and effectively. Have you seen or advised many businesses to draw up some sort of global talent mapping strategy to achieve this?
MF: Absolutely – today we have the technology to reach out to the best talent, regardless of where they are located. For some industries and some specific roles, it is also possible to create “virtual teams”, removing the need to physically relocate the individual, except for occasional business trips. Technology can also help us better understand what experience and capabilities we have within the organisation, a sort of “global talent inventory”. This information can be very valuable for organisations that need to match talent supply with demand on a frequent basis. For example, if a company is experiencing a shortage of specific skills in one location, it would make sense to explore whether the required experience is available in another location, before recruiting externally. A number of organisations have instituted “global talent reviews” whereby HR Business Partners and Talent Acquisition specialists from various locations regularly discuss talent supply and demand issues.
GT: In today’s economy, delivering a return on investment from a global mobility programme is key. How can organisations effectively manage the costs of their mobility programmes to remain competitive amidst the rising costs?
MF: There are a number of areas where mobility programmes can be cost-optimised, including: Policies, Exception Management; Rewards; Compliance; having a compelling business case for an expat package; Tax & Social Security Optimisation; Compliance; and Service Delivery Optimisation. By carefully designing and managing policies, processes and practices in these areas, it is possible to significantly contain cost. However these are highly technical and inter-connected domains, and should be handled by competent specialists.
GT: There is generally a (sometimes high) degree of disparity between local employment terms and expat employment terms. How should companies compensate effectively?
MF: Equity between expatriates and the local workforce has always been a sensitive issue. One of the key challenges is that expatriate remuneration is a rather technical subject and is often misunderstood. Many elements of a typical expatriate remuneration package are provided to cover incremental costs that the expatriate experiences as a result of the assignment. In addition, many expatriates sacrifice their spouse’s income when they accept a move overseas. Nevertheless, it is important for organisations to ensure that there is a clearly articulated rationale for creating an expat position. Companies should also define a specific duration for an expat position, after which the position (or the individual) will be localised. It is also important for organisations to understand the market value of the position being filled, and to gather some quality external benchmarks to understand the most appropriate remuneration levels.
GT: How do you advise organisations to foster a positive employee mindset towards international assignment packages and location options?
MF: In some organisations, employee mobility is the norm, and something that is expected of specific roles. If global mobility is an implied expectation of the job, employees should be made aware of this when they join. In organisations where a positive view has been achieved, international assignment policies are generally clearly communicated and applied consistently. In addition, international assignments are often rewarded with faster career progression. In these organisations there is typically less focus on remuneration, fewer exceptions, better cost management and more effective management of expectations.
GT: How should companies measure the ROI of global mobility programmes, services and policies?
MF: International mobility can be very expensive, therefore there needs to be a clear “Business Case” for Mobility programmes, and for each individual assignment. In other words, the tactical and/or strategic objectives need to be articulated sufficiently well, as to be able to justify the investment. Unless the objectives are defined upfront, it would be difficult, or even impossible, to measure the ROI, since we wouldn’t know what to measure.
GT: What is next for global mobility – where do you see things headed?
MF: Future mobility trends will continue to be shaped by business, economic, demographic and technology changes. We are likely to see more intra-Asian assignments, as well as assignments out of Asian countries that have historically been host locations, especially China. We are also likely so see better use of technology resulting in more short-term assignments, rather than long-term. The talent is likely to continue to come from traditional home locations (Western Europe, North America, Australia), but increasingly we will see assignees out of China, India and some Latin American locations. We are also likely to see some economies making greater efforts to encourage their overseas nationals to return home, especially countries that traditionally have experienced “brain-drain”, such as India, China, Malaysia, Mexico, etc.
Many thanks to Mario for his insights into global mobility, and ChapmanCG will continue to monitor and follow any trends, as we head into 2015 and beyond.